UK government mulls Bitcoin regulation

Anti-money laundering regulations should be updated to include Bitcoin and other virtual currencies, the UK Treasury has said.

The Metropolitan Police says criminals are using crypto-currency cash machines to launder money in London.

The government’s aim is part of a broader update to the EU rules which are under negotiation.

The update, revealed in Parliament last month, would mean that traders would no longer be able to operate anonymously.

‘Self-police’

Bitcoin expert Dr Garrick Hileman, a research fellow at the University of Cambridge, said that in jurisdictions such as New York, crypto-currency is already subject to tighter regulation.

“I think these announcements have a powerful signalling effect and put the industry on notice that the ‘cop on the beat’ is concerned and watching crypto-currencies more closely now,” he said of the Treasury news.

“This in turn will motivate companies to more effectively self-police bad actors.”

At a press briefing, Scotland Yard warned about the currencies’ popularity among criminals.

“Organised criminal groups have been early adopters of crypto-currencies to evade traditional money laundering checks and statutory regulations,” said Det Supt Nick Stevens, from the Serious and Organised Crime Command.

“Criminals have also used crypto-currencies to purchase illegal commodities on dark market sites with anonymity.”

A Treasury spokesman said that there were already “clear tax rules” for legitimate crypto-currency users.